Sec 44ad

This query is : Resolved

Rupesh (Querist)
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17 September 2013 Whether TAX Audit is required U/S 44AD if the Asseessee t.o. is 70 lacs and his N.P. is 2.25 lacs and assessee is a Senior Citizen having tax exemption limit of Rs. 2.5 lacs??

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 September 2013 No. it is not applicable. As long as the income is less than the exemption limit, no tax audit is required.

Rupesh

Rupesh (Querist)
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17 September 2013 but t.o. is 70 lacs and 8% of it Rs 5.6 lacs and assessee is showing only rs 2.5 lacs which is less then of deemed income.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 September 2013 Dear Rupesh. Kindly read the language of the section. The section says that if the income is less than 8% but more than the exemption limit, then audit is required. Otherwise not.

Rupesh

Rupesh (Querist)
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17 September 2013 Dear Nikhil,

I have read the language of the section many times and the section says that if the income is less than 8% "AND" (not but) more than the exemption limit, then audit is required.

So here, 1st condition is satisfied but 2nd not.

What we have to do in that case???

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 September 2013 Dear Rupesh,

"And" means both the condition should be met cumulatively to trigger an audit. Since only one condition is being met, the audit can not be invoked.

Nevertheless, the AO shall have the liberty to review your claim and if the income is found to be more than exempted limit, the consequence may follow.

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